(Bloomberg) -- Zimbabwe’s central bank retained the world’s highest borrowing costs at its first rate-setting meeting since Emmerson Mnangagwa was re-elected president last month.
The monetary policy committee maintained the benchmark interest rate at 150% for a second straight meeting, Governor John Mangudya said in a statement Thursday.
““The MPC noted with satisfaction the sustained decline in month-on-month inflation,” he said. “The MPC affirmed its strong commitment to maintaining the current tight monetary policy stance and to take all necessary action to firmly anchor inflation and exchange rate expectations.”
The pause follows rate holds in emerging markets such as Egypt, the Philippines, Indonesia, Taiwan and South Africa last week, where policy makers struck a cautious tone after a meeting of the Federal Reserve. The US central bank left its benchmark rate unchanged but signaled borrowing costs will likely stay higher for longer after one more hike this year.
The unchanged decision was largely expected after Treasury indicated earlier this month that it plans to maintain the tight fiscal and monetary policy regime to ensure economic stability and support the Zimbabwean dollar.
The local unit plunged about 85% against the greenback between May and June causing inflation to spiral upward. The government then intervened by liberalizing the exchange rate and introducing measures to promote the use of the Zimbabwean dollar, such as requiring corporate taxes to be paid in the currency.
Annual inflation slowed to 18.4% in September from 77% a month earlier after the statistics office revised its methodology to take into account the dominant role the US dollar plays in the economy. The central bank is targeting price growth of 60% to 70% by year-end.
Read More: Zimbabwe Revises Inflation Measure as US Dollar Usage Increases
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